State Antitrust Law: A Trap for the Unwary
Robert Langer, Nov 14, 2012
In 1994, while still with the Connecticut Attorney General's Office, I wrote a short essay that cautioned antitrust practitioners to beware of state antitrust enforcers and state antitrust law. The article was part of an issue that addressed significant changes in the world of distribution practices. Indeed the cover of the issue was entitled, Braving the New World of Distribution.
What I wrote in the first paragraph of that article still holds true today:
As businesses go speeding down the "distribution superhighway," I would hope they stop long enough (or at least look in the rear-view mirror) to keep an eye out for the state antitrust police cruiser. If not, the architects of the brave new world of innovative distribution arrangements may end up posting bail at the state antitrust police barracks.
The risks inherent in ignoring both state antitrust law and state antitrust enforcement reach far beyond vertical distribution relationships. Much has been written over the years about state antitrust enforcement, including the role of the National Association of Attorneys General Multistate Antitrust Task Force, and I will not seek to retell that story here. Nor will I dwell on either the state indirect purchaser "repealers" of Illinois Brick or the aggressive opposition of several states to the Leegin decision.
Rather, I will focus upon one such substantive difference between state and federal antitrust law to illustrate my point. The array of important differences between state and federal antitrust law present complicated counseling challenges for the seasoned antitrust practitioner, and a trap for the practitioner unaware that such distinctions even exist.